DYNAMIC MODELLING OF LIQUIDITY, DEBT AND CASHFLOW FOR PRIVATE RESIDENTIAL INVESTMENT FOR OWNER-OCCUPATION IN SINGAPORE

Abstract

Housing investment for owner occupation forms one of the necessities in life among food and clothing. However, to purchase a home is a crucial but costly financial decision a household has to make. Whilst the Singapore government has been providing substantial subsidies for the purchase of public housing, it is nonetheless the ultimate dream of many households to own private residential assets. The rapid appreciation of prices of private residential assets (properties) has raised deep concern on the affordability of such assets in recent years. This study investigates the structural dynamics of affordability for private residential assets for first-time homebuyers in Singapore from 1993 to 2003. The findings validate that leasehold private residential assets are generally affordable to the households in the mid-middle to upper middle group income groups.